a Turbo Tax expert said that we needed to do it under Turbo Tax business since my wife and I are 50/50 partnership in our LLC.
I have no idea why a so-called expert would tell you that you "need" to do this on a physically separate tax return that requires you to pay for another program that you do not need. Since you are filing a personal 1040 joint return (I assume) the need for TurboTax Business (which is not cheap) is completely uncalled for.
May I suggest you request a refund? Then I can assist you with reporting all of this on your personal 1040 tax return. Otherwise, if you want to go ahead and file the partnership return, I can help.
However, understand that filing the partnership return "WILL" create more unnecessary paperwork and "may" result in a late filing penalty, since the partnership return was due on March 15th. The late filing penalty for the partership return is $200 per month, per partner. So as it stands right now with a partnership return, you're looking at a $400 late filing penalty. On Apr 16th, that jumps to $800.
So I suggest you report this on your 1040 personal tax return only.
Weather you do this on your personal tax return or on the 1065 partnership return, the rental will still end up on SCH E as a part of your personal 1040 tax return and the rental income/expenses are still passive.
Overall, it's a waste of time and money putting a rental property into an LLC, and can have the potential to create legal problems down the road. For you, since the property is paid off there's no mortgage lender to deal with on that front. But the insurance company could be a different matter.
I'm willing to help with this either way you want to go If so:
- Who is the named property owner(s) on the property deed?
-Who is the named insured beneficiary on the property insurance policy?
